Economy

The one bit of good news in Twitter's user numbers

The one bit of good news in Twitter's user numbers

"Monthly active usage (MAU) increased 5% year-over-year and daily active usage (DAU) increased 12% year-over-year, marking the third consecutive quarter of double-digit growth", said Jack Dorsey, Twitter's CEO.

More importantly, Twitter reported its base of monthly active users was unchanged compared to the first three months of the year and up just five percent from a year earlier.

Twitter Inc. says its platform is new and improved, but its improvements did not bring in any new monthly active users this quarter.

Advertising revenue, however, also continued to fall, down 8 percent from the same period a year ago to $489 million.

A crackdown on abusive activity is making progress, as Twitter reported it is taking daily action on ten times as many abusive accounts compared to the same time a year ago.

The net loss for Twitter during the second quarter widened because of an impairment charge of $55 million that was related to a writedown of an investment. While Twitter may struggle to create a quality consumer experience for its content, there's little doubt that many companies see a lot of business value in mining it. The average analyst estimate was $144.1 million.

"You have zero user growth versus Facebook reporting 70 million new users [after the bell Wednesday]", Aegis Capital internet analyst Victor Anthony said Thursday on CNBC's "Squawk Box". Twitter reported adjusted earnings per share of 8 cents, above the FactSet consensus of 5 cents.

On the surface, Twitter's Q2 report provides good talking points for both bulls and bears.

The company's stock fell as much as 14 percent to $16.85 after it released its earnings report that showed a net loss and decline in revenue. Better global ad execution, and maybe somewhat better ad targeting - CEO Jack Dorsey mentioned in the shareholder letter that ad engagement rates have improved - seem to be helping.

Revenue: $574 million vs. $537 million expected. Advertising revenue fell 8 percent to $489 million, against $535 million in the same quarter a year ago.

Twitter has made several efforts to attract more users, including merging some features to streamline discoverability and making various UI refinements. That's despite engagement with ads - the amount people view or click on them - growing 95 percent.

For the current quarter, adjusted EBITDA is expected to be in a range of $130-$150 million while EBITDA margin is likely to be in a band of 25-26%.